When you hear the phrase ‘safe working environment’, you’ll probably be reminded of the last Safety, Health and Environmental (SHE) presentation or meeting you sat through. Today, though, I’d like to talk about a much more personal and – in my view – urgent aspect of workplace safety: psychological safety in your team and the role of you as a leader

Leaders play a vital role in creating an environment where employees feel comfortable to unleash their full potential and apply their problem-solving capabilities to any business challenge that comes your way. That’s the ideal situation. In many organisations, however, we see employees who are disengaged, holding back, or afraid to speak up. While it may be tempting to blame this on a lack of self-confidence, something much more insidious may be at work.

The secret of an effective team

Psychological safety is the knowledge that you won’t be punished for being vulnerable, taking a risk or making a mistake. This principle has been proven to act as a springboard for both well-being and productivity and is the foundation of the most successful teams in the world today. However, when a team or work environment is psychologically unsafe, the complete opposite is true.

Whether it manifests as concern about making career-limiting comments, being blamed for ineffective proposals or simply being misunderstood, a real or perceived feeling of threat from colleagues or superiors is a symptom of a psychologically unsafe work environment. The results of this creeping toxicity can be catastrophic, both for employees’ well-being and for the wider organisation.

Companies must be willing to address this problem by creating a culture in which everyone feels comfortable enough to be themselves. There’s no excuse for inaction.

Turning the tide

Psychological safety in the workplace is not only a moral responsibility but a financial necessity. According to US analytics company Gallup, a minimum of $960 billion is lost every year due to employee disengagement. Missing out on the contributions of talents who feel limited by a psychologically unsafe work environment, therefore, means losing a chunk of the potential turnover that would otherwise have been generated by those employees. This is especially significant for millennials and Gen Z workers, who will quickly disengage from work if they sense a lack of purpose, personal development and support.

Given the threat posed by poor psychological safety, but also the benefits to be reaped from strong employee engagement, one of the most important questions you can ask yourself as a leader is what you can do to foster and encourage a psychologically safe work environment.

Here are five essential actions you can take today:

1. Reflect on your leadership style and your organisation’s expectations

While it’s certainly important to acknowledge the huge variety of leadership styles that exist, especially in global organisations, there is only so much benefit to be gained from the often generic and unhelpful learnings offered by large-group leadership seminars and one-off behavioural assessments.

What they lack is your team’s specific context. It’s therefore essential that every leader in your organisation commits to regularly reflecting on their own leadership style, strengths and development needs in relation to their team. This means opening yourself up to direct feedback from colleagues, peers or team members. While this might feel uncomfortable at first, it will allow you to put yourself in your team members’ shoes and adapt your leadership style accordingly. This feedback must be regular, open and honest if you want to see long-term improvements. Even if that means using anonymous feedback channels, make reflective learning a priority.

2. Build strong connections in your teams

Interactions with team members should go beyond work discussions to include more personal topics, forming the basis for strong emotional connections. This type of sharing will allow you to relate better to your team members and, in turn, become more accessible to them.

As a leader, you also need to identify common interests and focus areas within your team. For example, it’s much easier to foster interpersonal connections when each member of the team can articulate what the organisation’s purpose means to them. As a result, communication will be more direct and open within the team with more clarity and less fear, creating an environment of openness and trust.

3. Shift from ‘power’ to ‘empowerment’

A leader needs to be humble, practise active listening and put their ego aside. This does not require a complete change in leadership style; rather, it requires adjustments to fit the team’s profile and needs. The first key task is to emphasise trust within the team continuously – the opposite of the discomfort that can be created in an overly hierarchical team.

One of the best ways to achieve trust is to empower your team by letting go of some of your own ‘power’. This means delegating decision-making and taking responsibility for the outcomes. It’s not about taking unnecessary risks but about encouraging, developing, giving opportunities and – as we noted earlier – creating a springboard for growth.

A good leader should feel confident enough to accept delegation, but this is far from always the case. I have seen many leaders start out with good intentions in this area, but when the first unexpected challenge arises, they take full control again and revert to their previous micro-management habits. Even worse are managers who do not take ownership of their team members’ mistakes and place full responsibility on them instead.

4. Recognise teams and individuals

It is key for leaders to review their approach to reward and recognition. In fact, to engage everyone and keep a positive team spirit, it is vital to find a balance between individual recognition and team encouragement.

On one hand, individual awards may lead to competition between employees, which can have a disruptive effect on team cohesion. On the other hand, recognition of team achievements can be an effective way of involving everyone in the group in the team’s success. The introduction of a system for peer recognition can also pay dividends.

Encouraging a robust team culture can help overcome fear in those who are hesitant to speak up. By making everyone a tangible part of the team’s success, you will create a snowball effect: team members who are involved and valued will feel more legitimate, more credible and more ready to make their voice heard, especially if their leaders and peers are consistently encouraging them. In this way, being trusted and recognised by leaders who are open-minded, thoughtful and responsive can truly change the game.

5. Keep paying attention to your inclusive behaviours

Finally, any leader whose ambition is to create a psychologically healthy team must train regularly, communicate clearly and compassionately, and reinforce the notion of inclusiveness throughout the organisation. Companies can facilitate this on an institutional level by including behavioural criteria related to a leader’s perception by their team in performance evaluations. To underpin such policies, it is essential to implement consequences for poor leadership behaviours that may generate fear or discomfort. Strong financial performance should never be seen as an excuse for poor people skills.

Crucially, it is the CEO’s responsibility to lead from the front when it comes to leadership expectations. A leadership framework that clearly describes required leadership behaviours and how these are being measured should be a reference for every leader. The Chief Human Resources Officer also has a duty to flag up problematic cases and make sure they are addressed, standing by their principles with courage.

In conclusion, a psychologically safe work environment – like any other organisational structures, processes and systems – should align with the culture the CEO has built within their organisation. By creating a positive and open environment where everyone is trusted, we can leverage the strength and diversity of any workforce. In such a work environment, every employee will feel they can contribute to the success of the company, which will ultimately translate into stronger value creation and a positive appreciation by shareholders.